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Not your typical business loan

The way in which big businesses innovate is shifting. Big businesses are bringing a start-up mentality to corporate organisations via internal incubators and accelerator panels and, as a result, many of the UK’s corporate giants are fully embracing the concept of ‘intrapreneurship’.

While still a relatively new term, intrapreneurship refers to an entrepreneurial approach where teams and individuals are driving innovation from within an organisation and it’s becoming a prominent and viable option for employees of a company that have many of the attributes of entrepreneurs.

Within many large organisations, there are very talented people with exciting ideas and new ways of doing things. Large companies have a reputation of being very effective at doing one thing well and often struggle to change direction or embrace change, and this is where intrapreneurship comes in.

Business bankers Richard, Veronika and Lucy are great examples of intrapreneurs, disrupting a practice and industry that they are experts in.

Like entrepreneurs, they are self-starters and know what they are meant to do in life. Whilst working within NatWest, the trio knew in their hearts that there was too much uncertainty and complexity surrounding business loans and that it was time for a different approach.

Introducing Esme Loans:

After years of seeing friends and family go to extreme lengths to start a business without securing a business loan, Richard Kerton, Veronika Lovett and Lucy Hasson knew something had to change. The three left their comfortable jobs in the corporate banking world to launch Esme Loans, an online business lender which provides a quote in just 10 minutes.

“We saw friends use things like credit cards and overdrafts again and again because of the fear of business loans…Which is crazy!” explained Veronika, Esme’s marketing director.

“It shouldn’t be easier to get a credit card than a business loan. People shouldn’t need to be nervous or scared about borrowing for business needs, especially given how comfortable they are borrowing for personal ones.”

With years of experience dealing with finance for small businesses, the three founders were confident that they could use this expertise and entrepreneurial endeavour to create something that really works for entrepreneurs and their businesses.

‘We’re not your typical bankers and Esme is very much not your typical business loan’

Having seen friends avoid business loans at all costs because of the assumptions they had about them, Esme Loans’ focus is to make the process of applying for a loan as simple as possible.

Veronika started: “People shouldn’t need to be nervous or scared about borrowing for business needs, especially given how comfortable they are borrowing for personal ones.”

“The reality is that most business lenders still make people go through a very long and difficult process to borrow money,” Lucy said. “They still ask lot and lots of questions and involve lots and lots of people – making it a really drawn out process. We’ve worked out how to be more agile and flexible than that.”

Richard added: “People don’t need lots of different lending products. That just adds to the complexity. When you think about what the customer really wants, a lot of the time that boils down to simplicity. A simple product explained in simple terms.”

While ‘not your typical business loan’ means a number of things to Esme, not taking away control of a business from the entrepreneur is a fundamental element, as Lucy explained: “People go into business because they want control. So, we tried to launch a product that allows them to have the utmost control over it. They’re in charge of their finances and of their business. That was one of the fundamental drivers behind the product proposition.”

In addition, what makes Esme Loans different, as Richard explains: “Is the way in which you can access the finance, the way that we talk about the finance, the way the product works and allows great flexibility than some other methods. It’s something we want to continue to evolve and adapt. We want to use the SME customers to refine the product and make it as flexible as we can to support them in different ways.”

It’s not just Esme’s offering that is flexible and varied. There is a huge range in the type and size of businesses borrowing from the platform. Turnovers range from £25,000 to over £20 million, while ages range from teenagers to founders in their 70s, 80s and even 90s. The types range from large corporates, manufacturers, retailers, wholesalers, lifestyle businesses and owner-managed businesses.

Richard describes these insights as a “real window on the UK entrepreneurship population”.

Entrepreneurial ambitions

Long-running ambitions to start a business existed for both Richard and Lucy.

Lucy was, inspired by her parents, and later her husband and sister who have gone on the start their own businesses. Richard’s ambitions were born from a 20+ year career working with SMEs on a daily basis.

He said: “I’d gained a lot of knowledge and appetite to want to go out and do it myself, having been around entrepreneurs, small business owners and large business owners. So, when this opportunity came along, it was too good to pass up.”

For Veronika, however, her entrepreneurial ambitions are fresh in comparison to her two co-founders. Having admittedly been focused on the corporate world until she left to launch Esme Loans, it was her time spent with small businesses that gave her the inspiration and confidence that she could do it herself.

“Through my time with the structured finance team I came across a lot of very successful businesses that have flourished from a good idea and then grew to scale.”

She added: “It made me realise, ‘if they can do it, why can’t I?’ And when this opportunity came up, it really seemed too good to be true from the outset. But, it was also a chance to really start something from scratch and design it the way you believe is the right way.”

Building from within

Esme is ultimately part of the NatWest group, though it is a stand-alone digital lender. The trio of founders say they’ve learnt how to combine the rigour and diligence of major High Street banks with the agility and flexibility of an alternative lender.

Richard explained what the working relationship with NatWest looks like, and the value of the support the bank has provided. He said: “We’re fortunate enough to have extensive support from within the organisation. We’re able to tap into resources in terms of finance and skills, knowledge and experience.

“But we were also left to our own devices to shape, develop and build the business.”

And that’s the crucial element of the entrepreneurial mindsets Richard, Veronika and Lucy are bringing to the table. “That’s the fun part,” Richard says, “digging into your own knowledge and skillset, and the ability to reach out into the organisation and external markets.

“When you’ve been in the bank nearly 30 years, you think you’ve experienced everything, but shaping the business you realise that you’ve not really experienced anywhere near as much as you thought.”

Being left to their own devices allowed them to experience the highs and lows of entrepreneurship. “We were able to learn what the pain points are; the fear of it not being a success, the first day of business and not a lot really happening, learning how to scale, recruit and resource appropriately at the right time,” Veronika recalled.

“Even just little things like all of a sudden having to order stationery, trying to figure out office space,” Lucy laughed. “It was incredible to be autonomous at the beginning, but also have the ability to use bank resources when support was needed.

“I feel like it was a learning curve for the bank as well – it’s been a long time since they launched a new business, so it’s been a very enriching experience for us and them.”

This intrapreneurship journey is showing a lot of benefits; for Richard, Veronika and Lucy, for NatWest, for job creation, and for the small businesses securing loans. So, should the UK be harnessing those benefits and developing an intrapreneurship culture?

“It’s massively important,” Richard starts, pointing to the value of small businesses “The one thing that stands out in the UK is how its economy is support by small businesses. We’re seeing a steady increase in the number of people who, at all sorts of ages, are building new careers by setting up businesses and following their vision.

“It’s fascinating just to see the sheer number of different ways people create businesses and create opportunities for themselves and their families.”

Veronika believes large organisations almost have a responsibility to empower their employees to achieve their dreams. She said: “Making them aware that, whatever their dream is, it’s not that unattainable, it can be set up. It’s not always as difficult as some people think it might be – whether it’s getting it off the ground or getting it properly funded. We’re seeing more communities and organisations willing to support that intrapreneurship culture.”

Understanding the value of the resources large organisations can offer to intrapreneurs is crucial to developing the intrapreneur culture, Richard emphases: “There’s an opportunity for large organisations, particularly the big banks, to create this sort of environment to support employees; workplaces, access to skills, support to get the business going in the first place.

“We’ve seen that rise over the last two or three years, and we need to continue that side of things to encourage that passion and instinct.”